New Delhi: State-owned insurance giant LIC, which saved the much-hyped ONGC share auction, has lost around Rs 900 crore in market value of the acquired stake in the oil major in just two trading sessions after the Offer for Sale (OFS) on Thursday.

LIC, according to official sources, picked up 40 crore shares, or 95 per cent of the state-owned ONGC shares on offer, sold through the auction route and witnessed substantial erosion in value of its investments thereafter.

Taking into account the average price of Rs 303.67 per share, the acquisition of 40 crore shares of ONGC, or about 4.6 percent stake, through the auction route would have cost the LIC about Rs 12,146.80 crore.

The value of investment at Saturday's closing price works out to be Rs 11,234 crore, reflecting a notional loss of about Rs 912 crore to the insurance major in just two days.

Shares of ONGC closed at Rs 280.85 a piece, down 0.21 percent on the BSE yesterday.

The government had earlier said it received an average price of Rs 303.67 for a share of ONGC, 4.71 percent higher than the floor price of Rs 290.

"The volume weighted average price (of ONGC shares) was Rs 303.67 per share against floor price of Rs 290," the Finance Ministry had said a in statement. The stake sale yielded the government Rs 12,767 crore.

As of October-December quarter of 2011-12, Life Insurance Corporation of India had stake of 3.23 percent in the ONGC. With the fresh equity, total holding of the insurer has goneup to about 8 percent.

It will still be less than the 10 percent investment cap fixed by insurance regulator IRDA.

The first-ever auction of a state-owned blue chip got a very lukewarm response from the foreign financial institutions and domestic banks on March 1, and the issue would have flopped but for the LIC which picked up 95 per cent of equity on the block.

So far this fiscal, the government has been able to raise about Rs 14,000 crore through disinvestment in public sector undertakings (PSUs), against the budgeted Rs 40,000 crore.

While Rs 1,145 crore was raised through an follow-on public offer (FPO) of PFC, Rs 12,767 crore came from 5 percent stake auction in ONGC.

The auction received a total of 3,982 bids for over 54 crore shares. However, 1,219 bids for about 12 crore were cancelled due to various reasons, including insufficient funds. In all, there were 2,763 valid bids for 42.04 crore ONGC shares. The government had planned to sell 44.77 crore shares.